Surging Non-Profit Sector Seeks Senior Leaders

Non-profits are emerging from the pandemic as more vital than ever, say recruiters who serve the sector. But they need strong leadership. The growing demand for such talent, and a lack thereof, poses tough challenges.

August 24, 2022 – During a time of tremendous societal transformation, not-for-profit organizations provide support and stability for individuals and their communities. These mission-driven institutions create equitable opportunities for all, leverage funds and resources for critical social programs and initiatives, and ensure at-risk and underserved individuals are not left behind, according to WittKieffer. The value of not-for-profits has only intensified as a result of the COVID-19 pandemic and corresponding progressive social movements. Executive recruiters say today’s not-for-profits face a growing need for exceptional leaders. “Passionate, driven and talented not-for-profit leadership is vital for managing increasingly complex challenges while keeping organizations focused on their central missions,” said WittKieffer. “Without strong executives, non-profits struggle and thus individuals and communities suffer. CEOs, executive directors, and senior teams in the non-profit sector must be able to envision, develop, and execute strategic plans that ensure their organizations can succeed and continue to make a difference in the lives of those they serve.”

Surging Non-Profit Sector

The market remains very competitive for top non-profit leaders, according to Diane Charness, co-leader of the non-profit practice at ZRG Partners. “The sector is truly at a crucial time, needing innovative and transformational leaders to scale their organizations,” she said. “This requires a diversity of skills and perspectives. I encourage clients to be open to a range of candidate profiles including those from industry with the sensibility required to lead a mission-based institution while also leading in a shared governance environment. It takes expertise and experience for the executive search consultant to aptly identify candidates who will make a successful transition, as not all do. Search consultants that him/ herself have worked at the intersection of the public and private sectors are best prepared to understand the talent needs of a growing social impact organization.”

Non-profits are defined by their tax status in the U.S. and have been the stewards of providing much needed services to communities around the country. “With the profound changes we’ve experienced during COVID and expanding social movements, there is an extraordinary opportunity for the private and public sectors to join forces to address society’s most pressing challenges,” said Ms. Charness. “Non-profit organizations that understand this evolving trend will thrive through increased financial support, innovative leadership talent, and improved operational platforms.”

Those successfully leading corporate entities will have built transferable skill-sets and relationships that can benefit mission-based institutions, according to Ms. Charness. “The ability to facilitate and communicate an organizational vision, scale revenue streams, develop impactful products/programs, enhance operational efficiencies, deploy leaders, and create meaningful brand awareness and messaging, are all necessary to driving success of a company, as well as a non-profit,” she said. “Corporate leaders seeking greater impact or meaning to their work, may find themselves seeking opportunities in the non-profit sector. I embrace cross-sector executives and believe these diverse experiences inform the most transformational leaders. However, there are nuances to inspiring and driving the work of non-profits that must be understood, and valued, before making the transition or it will be a rocky road ahead for the leader and the organization.”

James Abruzzo, the long-time global head of the non-profit recruiting practice at DHR Global, notes that in his four decades of recruiting senior leaders to non-profit organizations he has never seen a time of such demand coupled with a dramatic lack of supply of talent. “My phone, and those of my many non-profit practice partners, is ringing constantly with inquiries from current and prospective clients, seeking talent,” he said. “This demand was predicted by Bridgespan and others; however, it was delayed by the pandemic and now, with things somewhat normal, the imbalance between need for talent and the availability of that talent is at crisis level. And the job seekers’ attitudes are changing – high inflation, working from home, and a general existential sense of how important is career in the face of death and disease, is leading individuals to leave jobs either for much higher paying positions or just to reevaluate one’s life.”

Attendance Driven Non-Profits

Mr. Abruzzo says the non-profits that are thriving are often attendance driven. For example, many non-profit arts and culture clients are doing well because of a pent-up demand for live culture. In addition, these organizations have gone through a period of cutbacks and cost-savings combined with significant one-time cash infusions from the Paycheck Protection Program and Shuttered Venue Operators Grant government funds.

“If we consider a trend toward rethinking work, the trend of senior for-profit executives looking to non-profits is not as popular as it once was,” said Mr. Abruzzo. “However, with the above-mentioned demand, any talented, warm blooded individual can now find work. And board members, who are retired and well-off, are seeing the openings, the lack of talent, and the need for leadership in their own organizations, and some are deciding to take the helm either temporarily or for the long term.”

The Great Reshuffle

“On the surface, there are more senior-level positions open than there are people to fill them,” said Allison Fuller, co-founder and managing partner of Envision Consulting. “Non-profit employers know this, and are responding to the Great Reshuffle by offering flexible work arrangements, providing innovative benefits, and taking actionable steps to strengthen DEI within their organization. But at the same time, culture is front and center.”

For every investment employers are willing to make on work schedules and building leadership pipelines, they are also enormously cognizant of workplace dynamics and how the right hire fits into their strategic initiatives, according to Ms. Fuller. “But because it’s an employee’s market, leaders are scrutinizing their moves just as carefully, and aren’t willing to leave their organizations for a few extra perks,” she said. “These professionals are seeking meaningful jobs and often that means working for an organization that can demonstrate a real commitment toward DEI through its policies and practices. The leaders are out there, and there are matches to be made, but as both sides take a long view of what constitutes success, placements are simply taking more time and our pools have to be more diverse.”

Envision Consulting has worked to take a more data-driven approach to these hiring shifts, partnering with its local non-profit center in Los Angeles to release the Equitable Non-profit Workplace Report. More than just a compensation survey, the study provides a number of data-backed findings on what non-profit employees want, what employers are actually offering, and how that is impacting job satisfaction, retention, and advancement in the non-profit sector. According to the report, one in three employees surveyed agreed that most of their colleagues would have to leave their organization in order to get a promotion.

Approximately one third of employees in their 20s, 30s, and 40s said they did not understand the criteria for advancement in their organizations, and just over one-third said they would have to leave their current position and employer in order to get a promotion. The report also showed that while DEI-focused recruiting and conversations have been implemented by more than three quarters of organizational respondents, fewer than one-third have adopted an explicit DEI hiring policy.

Thriving Non-Profits

“Organizations can remove barriers in the hiring process, by eliminating credit checks on candidates, allowing everyone to be able to apply online, adhering to structured hiring processes, and ensuring job descriptions are unbiased,” said Ms. Fuller. “Envision is recruiting from beyond the typical sources, ensuring more than 90 percent of our finalist panels include candidates from underrepresented communities.”

As a consulting firm that works exclusively with non-profits, Envision is seeing that with its clients across the firm’s executive search and strategy services. “Right now, organizations with diversified funding streams who have been able to pivot services during the pandemic have benefitted from increased participation from individual and foundation donors and re-directed COVID funding,” said Ms. Fuller. “The non-profits who will thrive in the long run will likely be the ones that have clear alignment across leadership, particularly on what it looks like for the organization to carry out its mission. So, there’s no question whether the mission is relevant – in fact, it’s probably more critical now than ever before.”

Never Been Busier

To paraphrase the CEO of one of the Forbes top 25 executive search firms, recruitment of senior leaders by non-profits has never been busier. “The challenges of navigating COVID brought profound pressure on leaders in just about every non-profit sector,” said Karen Alphonse, a search solution leader and executive coach with “Many organizations, such as education and arts and culture, have had to completely reinvent themselves, and there has become an intense focus on fundraising and day-to-day operations. This hastened the thinking of some leaders already considering retirement, and some organizations continued to rely on interim advisors and existing staff to continue to stay afloat. Now search professionals are finding that they’re reacting to pent-up demand coupled with a diminished talent pool fueled by the Great Resignation, and much of the candidate pool is thinking very differently about work and what they’re interested in doing. For many there’s a quest to find professional satisfaction and work-life balance. COVID threw a spotlight on quality of life, health, comprehensive benefits, and social issues.”

Organizations not already distinguished by diversity, equity, and inclusion are instilling it into the operations and are attracting leadership, staff, and donors who share them, according to Ms. Alphonse. “Non-profits want their leaders to have a sophisticated understanding of the issues and there is increased demand for leadership to reflect the communities,” she said. “This has created a stampede to recruit accomplished leaders who bring perspectives that represent a full spectrum of economic, social, cultural, gender, and educational backgrounds, just to name a few. To facilitate this, many organizations have created C-suite DEI officers.”

Although different entities define “thrive” in a variety of ways—be it by profit, growth, total assets and even popularity—across the board the non-profit sectors that are prospering are those involved in healthcare, human services, advocacy, human rights, and the environment, according to Ms. Alphonse. “COVID put tremendous and immediate demands on hospitals, clinics and emergency health facilities, all of which stressed internal systems, causing non-emergency services to take a backseat,” she said. “These kinds of facilities have had to re-examine their services to find ways to generate a profit during a period of shifting priorities and uncertainty. In the education sector, the maze of COVID restrictions, options and vaccination put pressure on universities, schools and learning facilities to abandon the old-way-of-doing-things. The change in the political and social landscape has caused a lot of upheaval.”

Non-profits that champion diversity are also enjoying a new lease on life. “Social activism, at an all-time high in the wake of George Floyd, the overturning of Roe v. Wade, and attacks on the rights of immigrants and the LGBTQ+ community, has given rise to focused thinking,” said Ms. Alphonse. “At the international level, so has the political unrest in the Ukraine, Middle East, and Africa. Organizations that give voice to our collective angst about the future of the democracy and the fate of the planet have been re-energized by recent geo-political events. Based on international unrest, we can foresee that refugee-friendly, resettlement, and international aid organizations will experience a resurgence.”

Many business sectors across the globe are experiencing a job seekers market, and the non-profit arena is no different, according to John Toolan, vice president at Bryant Group. “Those seeking leadership positions understand that there are more quality opportunities available than there are qualified people to fill them, which allows them to be more selective,” he said. To help organizations stand out, Bryant Group encourages employers to focus on what makes their organization impactful and lean into that.

Related: Retaining Your Employees During the Great Resignation

Keeping the mission at the forefront of each conversation and interview to ensure that there is mission alignment between the candidate and the organization will create a more enjoyable interviewing process for both sides,” said Mr. Toolan. “Studies have repeatedly shown that employees seek a sense of value in their work. Helping them understand how their contributions during work hours impact the world around them is a powerful recruitment tool. As an additional bonus, it can encourage the candidate to turn down offers from other organizations to join yours.”

Replacing a Longtime, Non-Profit CEO
Many a search firm has encountered the following scene, probably more than once: A frantic board chair or search committee member calls because their esteemed founder and long-tenured leader (LTL) has decided to retire. The organization has no succession plan or otherwise strong internal candidates so they must engage a search firm.

Once on board, when staff feel that they are contributing to something larger than themselves, and larger than their organization, they have a sense of fulfillment that aids in their retention. With the large number of positions available, the quantity of opportunities can feel overwhelming to candidates, according to Mr. Toolan. “Using a proactive search firm can help because they market your opportunity to people who are likely to align with your mission,” he said. “Additionally, they connect with people who are open to new opportunities but are not actively seeking new roles. This can lead to a broader and more diverse pool. Often it also reduces the rush to extend an offer before a competitor.” Bryant Group finds that non-profits that have cultivated a genuine relationship with their constituents fare far better than those that are more transactional. Personal and national economies constantly change, and when they do, charitable giving can be affected.

Profits Still Matter

The public has a common misconception that non-profits don’t need to generate profits. Nothing could be further from the truth, according to Mr. Toolan. “The fact is that non-profits funnel their funds back into the impact areas of the organization rather than compensate shareholders,” he said. “The more income a non-profit generates, the greater its reach and impact. Passionate leaders skilled at evaluating operations and creating efficiencies can propel the growth of non-profits quickly and sustainably.”

Bryant Group finds that many senior executives reach a point in their career when they have climbed the mountains they wish to conquer and now want to contribute to the greater good of society. As an example, Bryant Group recently conducted a search where a leading candidate left his law practice because he was “tired of making billionaires wealthier.” He brought his superior negotiating skills to the higher education sector, where he renegotiated contracts and leases, resulting in significant cost savings.

“In these cases, the executives enjoy bringing their expertise to bear to improve their local or national community or to contribute to causes that they hold dear,” said Mr. Toolan. “This brings more diverse thought into the organization and can lead to other forms of diversity. Often the infusion of an executive from outside of the non-profit area aids in identifying roles that allow for transferable skills. This opens the door for others from corporate America to join the non-profit world, experience its benefits, and diversify its workforce.”

Related: The Decade Ahead for Non-Profits: Great Pressure, Transformation and Big Impact on Talent

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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